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Econ+100-+Practice+exercises+for+Midtem+II+Fall+2011

# Econ+100-+Practice+exercises+for+Midtem+II+Fall+2011 - UCI...

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UCI- Practice Exercises for Midterm II Econ 100 – Prof El Hag Fall 2011 Multiple Choice Questions 1) When the average product is decreasing, marginal product A) equals average product. B) is increasing. C) exceeds average product. D) is decreasing. E) is less than average product. Answer: E Figure 6.1 2) Refer to Figure 6.1. At point A, the marginal product of labor is 3) Refer to Figure 6.1. At which point on the total product curve is the average product of labor the highest?

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4) Refer to Figure 6.1. Which of the following statements is false? 5) Joe owns a coffee house and produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor). What is the average product of labor? A) AP = 5 B) AP = 5K C) AP = 5L D) AP = 5K/L Answer: B 6) Joe owns a coffee house and produces coffee drinks under the production function q = 5KL where q is the number of cups generated per hour, K is the number of coffee machines (capital), and L is the number of employees hired per hour (labor). What is the marginal product of labor? A) MP = 5 B) MP = 5K C) MP = 5L D) MP = 5K/L Answer: B 7) A firm's marginal product of labor is 4 and its marginal product of capital is 5. If the firm adds one unit of labor, but does not want its output quantity to change, the firm should
8) An L-shaped isoquant

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